The dangers facing video games

This week saw the release of two of this year's blockbuster video games: Micro
soft's "Halo 4," and Activision's "Call of Duty: Black Ops 2."

In its first 24 hours on the market, "Halo 4" generated $220 million in sales. That dwarfed the opening weekend numbers for 2012's biggest films like "The Dark Knight Rises" and last week's "Skyfall."

Yet, the stocks of video-game companies remain firmlyin what has been a multi-year bear market.

What gives?

Well, hardcore gamers haven't gone anywhere just yet. They're still ponying up the bucks for top franchises like "Halo," "Call of Duty," and "Grand Theft Auto."

Everyone else, well, they just started playing with their phones.

Think back to 2006-2008. Mass-market friendly casual fare like the Nintendo Wii and "Guitar Hero" were hot because of innovative user interfaces that were extremely user-friendly to non-gamers. The industry grew tremendously off this trend.

But once the novelty factor wore off, those people stopped buying expensive console games and moved on to two new platforms.

The first was social-based games from companies like Zynga, which incidentally have fizzled out.

And the second one, the one that's still going, is the smartphone. Since Apple introduced the iPhone in 2007, smartphones have advanced radically in terms of graphics performance, design quality and availability of inexpensive games.

And we now have a generation of gamers that is conditioned to expect video games to be very cheap.

This is great news for small companies aiming to sell 1 million copies of a 99-cent game. But it's terrible news for the big boys that need giant sales numbers to move the needle.

Michael Comeau is a columnist and buzz editor at Minyanville.com